Central bank updates fund authorization and fund service provider information
On May 19, 2022, the Central Bank, in its latest Markets Update, indicated that it had updated the Fund Authorizations and Fund Service Providers sections of its website to include: (i) a section dedicated website containing information on the exemption request process for UCITS and RIAIF/QIAIF; (ii) guidance on how non-EU investment managers, investment advisers and alternative fund managers are scrutinized by the Central Bank; and (iii) a new section containing email addresses for the different types of queries typically submitted to the Central Bank. These updates to the Central Bank website are part of a broader review of the current Central Bank authorization processes for UCITS/RIAIFs and QIAIFs which is currently underway.
UCITS derogation requests
As part of these updates, the Central Bank clarifies the process to be followed when submitting a waiver request, recalling that such requests are usually reviewed by a waiver committee within the Central Bank which meets monthly. . It should be noted that this process does not apply to exemptions for newly authorized UCITS under Regulation 76 or relating to master-feeder structures under Regulation 78 of the UCITS Regulations.
Requests for UCITS derogation must be made in sufficient time for the Central Bank to examine the request before an application for authorization is submitted. The request must contain:
- a detailed and complete submission clearly describing the settlement for which a waiver is requested. This submission must detail the aspects of the proposal that do not fully comply with the relevant regulations, state the reason why the relevant regulations cannot be complied with and why the proposal should be deemed acceptable;
- a letter requesting the waiver and demonstrating how the proposal does not dilute investor protection or conflict with relevant laws/regulations; and
- copies of the prospectus(es)/supplements, if any.
When an exemption has been granted in principle by the Central Bank, the letter requesting the authorization of the UCITS or the authorization of its compartment(s) must refer to the exemption requested. In addition, the prospectus must also detail the exemptions granted.
RIAIF/QIAIF waiver requests
Similar to UCITS waiver requests, waiver requests for RIAIFs or QIAIFs will generally be reviewed by a waiver committee within the Central Bank, with the details to be submitted as part of the request being the same. than those set out above, except that it is the section of the Central Bank’s AIF Rules which should be referenced rather than that of the UCITS Regulations. The same requirements apply to the authorization letter and the prospectus as those described above for UCITS.
The Central Bank details two commonly requested waivers and their expectations in relation to these specific waivers, namely:
- waiver to allow investment by “the manager or an entity of the manager’s group” as an additional exemption from the minimum subscription requirement; and
- derogation from chapter 2, part II, section 2, paragraph 8 of the AIF regulations relating to the restriction of investment in a fund which itself invests more than 50% of its net assets in another fund.
Applications for Non-EU Investment Managers, Investment Advisors and/or Alternative Fund Managers
This section of the Central Bank’s website provides information on applying for authorization for an investment manager, non-discretionary investment adviser and non-EU AIF manager, as well as changes that require notification prior to the Central Bank.
For example, it should be noted that where an application is made in respect of a non-EU investment manager, an attestation letter is required from the management company or, if lack of management company, fund board confirming maturity due diligence has been carried out on the proposed investment manager and the guidelines set out the minimum information the Central Bank expects to receive in respect of these requests.
The Central Bank has provided email contact details which can be used for the following types of enquiries:
- Submission of UCITS and RIAIF umbrella requests, derogation requests for UCITS, RIAIF and QIAIF, pre-submission or ad hoc authorization requests for UCITS, RIAIF and QIAIF and general questions on the fund authorization process – [email protected] centralbank.ie
- Submission of investment manager expedited authorization requests, submissions of updates relating to previously authorized investment managers and general questions relating to the investment manager authorization process – [email protected]
- Submission of UCITS merger applications and general questions relating to the UCITS merger process – [email protected]
- General questions regarding post-authorization processes for funds – [email protected]